JMak97008 wrote: ↑Thu Jan 21, 2021 5:46 pm
My local broker has sent his offer to underwriting and Im sitting here wringing my hands about whether I am too far down the process to back out and avoid paying any fees.
My local broker hasn't replied to my email where I indicated that I received a no-cost 2.650 offer.
Don't worry, you can still back out. As long as you didn't pay for any sort of deposit or get an appraisal done, you won't be out any fees. People back out of locked mortgages all the time, sometimes even after all the title work and underwriting are done.
Of course, it is courteous to let people know immediately once you have decided to back out of a deal. At that point, it is possible the loan officer or broker will be upset with you, or they may not be upset at all. I've had both experiences, but usually the latter.
The reality is that you're learning as you're going, and you're not looking to screw anyone, so you're in good moral standing in my view. If you get a better offer (BTW, I knew that LenderFi would beat your other offers!), then you can give the other lenders a chance to beat it. If they don't beat it, then it makes sense for you to back out, and no one can really blame you for that.
LenderFi is one lender who usually tells borrowers that they view a lock as a commitment, and once you lock, they do not entertain the idea of beating other offers, and they may be somewhat annoyed if you back out. What I appreciate about them is that they are upfront about this. If you haven't locked already with LenderFi, you may want to leave them unlocked as you give your other lenders a chance to beat them.
If you've already locked with LenderFi, then when you get back your best revised offer(s) from the other lenders, at that point you can decide whether you'd like to proceed with LenderFi or the other lender. If the difference is small then you may want to proceed with LenderFi, but at some point it may be large enough that you break with LenderFi even if it means upsetting them. Upsetting them is not a huge deal; the worst case scenario might be that they choose not to work with you on a loan in the future, and the best case is that nothing happens.
Just to comment on a previous point you made, if the title work already got started with Fidelity, that doesn't mean you need to use them if you move to a different lender. It happens all the time that a title company starts some work but the borrower withdraws and they don't get paid. The reality is that they're not doing much work unless the loan is consummated. The title insurance fees are compensation for risk that they would only take if you proceed with the loan. And the settlement fees are compensation for work that is primarily back-loaded. You should feel totally comfortable using a different title company with a different lender. I'd also add that some of these lenders have special negotiated title rates that may be lower than a reissue rate, so just be mindful of that possibility.
Just to summarize: don't stress. You're in a great situation. You have an excellent offer from LenderFi and can't do worse than that. Meanwhile you have 3 other lenders who will try to compete for your business, which means you may do better. And you haven't gone anywhere near the point of no return with any of them.